Hialeah seeks $3 million in unpaid water bills from two major hospitals
The city of Hialeah, which is trying to cut back on costs, is attempting to collect over $3 million in unpaid water bills from its two largest hospitals, money that could potentially be used to help update its faulty and aging water system to make the utility cheaper for residents.
The problem is that city leaders say Healthcare Systems of America, which operates Palmetto General Hospital and Hialeah Hospital, has ignored the city’s efforts to collect payment. The health system, known as HSA, argues that the city has not updated its system to let it make payments and is concerned the city is attempting to overcharge it to make up for the trail of debt the hospital’s bankrupt former operator left behind.
The dispute, which has spanned three mayoral administrations going back to at least 2021, has now hit a breaking point. Bryan Calvo, the city’s new mayor, is fed up. The city in April sent the hospitals a letter, warning them to make a payment deal by May 17 or risk stricter enforcement efforts. That could include putting a lien on the properties, taking the hospitals to court or — in a worst-case scenario — cutting off some or all of the hospitals’ water, a move the city threatened over two decades ago in a similar situation with Palmetto General.
“The city is basically subsidizing them to the tune of roughly $3 million,” Calvo, who sits on an advisory board for Palmetto General Hospital, told the Miami Herald. “I can’t reconcile that.”
Together, the combined hospital bills make up about 66% of the $4.5 million overdue water-related payments the city is attempting to collect. Data the city provided to the Miami Herald shows that fewer than 40 of its over 60,000 water and sewer accounts are delinquent by more than 120 days, according to the Public Works Department.
Calvo’s efforts to get the hospitals and other businesses, condominiums and residents to pay overdue bills come as the city is in the midst of a court battle with Miami-Dade County, which has accused the city of owing nearly $18 million in unpaid utility bills.
On Friday, attorneys for HSA and the city will meet to try and resolve the longstanding dispute that has left the city short millions.
What do the hospitals owe?
Palmetto General owes the city about $1.35 million in unpaid water and sewer payments, according to documents obtained by the Herald. Its sister Hialeah Hospital owes about $1.03 million.
The rest of their delinquent water bills comes from overdue bills associated with former operator Steward Health Care System, which filed for bankruptcy in May 2024, and health giant Tenet Healthcare, which sold the hospitals to Steward in 2021. Records show Steward’s water bill payments were sporadic in 2023, with only one payment made in 2024, a few months before the health giant filed for bankruptcy. Tenet and Steward Health Care did not respond to the Herald’s requests for comment.
The mayor said that for the city to improve water services, it needs to collect on the hospitals — “the same way that we do with anybody else.”
“As important as these hospitals are, there are other hospitals in the city, and those other hospitals are paying their water bills, so there is no excuse,” Calvo said.
Calvo told the Herald the city plans to “use any enforcement mechanism that is allowable under the law” to collect payment. That may include going as far as cutting off some or all of the hospitals’ water supply if a deal isn’t made.
“I don’t want to put anybody’s care at risk, and we’re going to do everything we can to avoid that,” Calvo said when asked about potential water service cuts. “But at the end of the day, we can’t have the situation continue as it is, and we’ll try every mechanism that we can before it escalates to something like that.”
HSA, in an email to the Herald, said it had not paid Hialeah because the city wanted to charge it for Steward’s overdue payments.
“HSA has tried to make water payments, however, the City stated that they will apply payments from HSA to the previous Steward invoices. This is not an acceptable option as HSA is not responsible for Steward’s payments per the Steward bankruptcy Court,” HSA said. “Additionally, HSA has been requesting its own water account from the City for more than a year, however, the City has continued to insist that HSA pay the old water bill from Steward.”
Hialeah Public Works Director Kevin Lynskey disputes HSA’s claims and told the Herald that the health system has repeatedly ignored emails from the city, including as recently as April, to start the account creation process.
“We then began sending monthly spreadsheets showing all balances under HSA, since we could not bill them directly without accounts in their name,” Lynskey said. “We also continued sending bills to Steward, as the accounts remained under that entity.”
How the debt was discovered
The unpaid water bills are the latest problem to pop up for the hospitals, which struggled to buy supplies, repair equipment, and pay vendors and staff on time long before Steward Health declared bankruptcy in 2024.
The hospitals, along with their sister properties of Coral Gables Hospital, North Shore Medical Center in North Miami-Dade and Florida Medical Center in Lauderdale Lakes, are also in the middle of a power struggle playing out in court between two executives trying to wrestle control of hospital operations from each other.
And Palmetto General — the South Florida gem of Steward’s, and now HSA’s, operations — is facing at least three lawsuits in Miami-Dade Court by vendors who have accused it of not paying thousands of dollars, and in at least one case over $1 million, for provided supplies and services.
Records show Palmetto General and Hialeah Hospital have also not paid $1.6 million combined in property taxes since 2025, though HSA says it’s challenging the assessments and is hoping to find a resolution with the county’s property appraiser soon.
The Hialeah water debt was brought to the attention of former Mayor Esteban Bovo’s administration by Lynskey shortly after his hiring as Public Works director in March 2023 but was only known by a small circle of employees, the Herald has learned. This is the first time the issue has become publicly known, including to members of the City Council, some of whom said they were surprised to learn about the massive debt from a Herald reporter.
No one has been able to answer why it took the city so long to realize that the hospitals were behind on their bills. Bovo did not respond to the Herald’s request for comment. The Herald has been unable to contact Armando Vidal, who served as Public Works’ longtime director until March 2023 and whose last known phone number is now disconnected.
An email obtained by the Herald shows that in January 2025, high-ranking Hialeah officials, including Lynskey, the city attorney and Bovo’s chief of staff, were in discussions with HSA on how to proceed with water payments, including whether the city should bill HSA for Steward’s overdue balances.
In those emails, HSA said it did not want to pay Steward’s overdue balances and would only pay bills from after Oct. 30, 2024, when it became the permanent operator of Palmetto General and Hialeah Hospital. It also asked to create new accounts to avoid delinquent balances.
After multiple meetings with representatives from HSA, Bovo’s administration ultimately decided not to shut off water service to HSA, citing the financial distress the hospitals were experiencing, according to a former high-ranking Hialeah official.
But the unpaid bills kept accumulating, and no new accounts were made.
“I would have never let this get to this point,” a frustrated Calvo told the Herald. “It’s obviously a complicated situation now, but how can I tell an elderly resident living alone on a fixed income that if they fail to pay a $100 water bill, the city will shut off their service, while at the same time allowing for-profit hospitals to accumulate more than a million dollars in unpaid water bills and continue operating without interruption?”
Calvo said the city is considering establishing “partial flows,” which would restrict the hospitals’ water usage for some things, such as showers, but still let it use water for other situations, such as flushing toilets and hand-washing. Shutting off some or all of the water for two hospitals that provide life-saving care to the community, a last resort to get payment, would be a difficult decision.
Lynskey said the city had previously considered turning off some of the hospitals’ water meters but did not do so because it couldn’t identify any that were not related to medical and emergency services.
But Calvo noted that there are other hospitals in the area that could care for the community if Palmetto General and Hialeah Hospital had their water cut off. Larkin Health System has a 247-bed hospital in the city. Mount Sinai Medical Center operates a standalone emergency room. And a short drive away is Jackson West, a 100-bed hospital in Doral that is operated by Miami-Dade’s public hospital system.
This is not the first time the city has had to threaten Palmetto General with stricter enforcement to get payment.
Raúl Martinez, a former mayor from the ‘80s to the early 2000s, told the Herald he dealt with a similar situation in 1999 involving Palmetto, which, at that point under Tenet leadership, had not paid its water bills for several years.
He said he told the Public Works director to issue a notice to give the hospital 72 hours to pay, or the city would cut the water off. “Every business has to be treated as equal as an unpaid bill for a resident,” Martinez said.
Within days of the city putting a lien on the property, Tenet agreed to pay $50,000 to settle the outstanding water and sewer charges that had been pending for four years, records show.
As the city tries to work out a new deal with the hospitals all these years later, it’s waiting to see what happens with Steward’s ongoing bankruptcy dealings. There’s a chance the city might not recover all, or any, of the debt owed by Steward.
That’s because the city is considered an “unsecured” creditor, which means it has less priority than other creditors for payment, according to bankruptcy claim data.
That doesn’t stop HSA’s ability to pay its current bills, Calvo said.
“They’re going to have to pay, and we need to be able to use the tools available to us to enforce,” Calvo said. “Because if not, we’re just kicking the can down the road.”
This story was originally published May 8, 2026 at 6:56 AM.
